Actic Group AB (Buy, TP: SEK56.00) - Acquisitions delivering
Actic’s Q1 was a little mixed with solid integration of recent acquisitions and better cost control balanced by a slightly weaker underlying ARPM growth. Organic growth still seems costly while Actic’s acquisition track record looks solid, suggesting a change to future capital allocation. The lack of focus on this small-cap growth story has led to an attractive valuation of 10.7% 2018e FCF yield (15.6% pre-expansion capex). We retain our BUY; target price lowered to SEK56 (57.5).Actic Group AB is a Sweden-based company, which is primarily engaged in the provision of a range of recreational services. The Company operates a net of over 150 gym clubs located in Sweden, Norway, Finland, Germany and Austria. Actic Group AB provides personalized programs for individuals and groups, swimming lessons, access to swimming facilities and a number of pre-scheduled fitness activities, among others. The Company's operational model bases on one-time visits and subscriptions/club memberships, with an emphasis on serving small to mid-sized town inhabitants in cooperation with local municipalities. It also provides online booking services for memberships and classes via Internet portal.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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